SPX weekly Iron Condor; so far so good.
Friday the market was quiet compared to many recent days; SPX had just a 9 point range between the high and low of the day. The index closed at 2031.92, virtually flat from the previous day.
Below is the status of our current open SPX weekly Iron Condor:
This week's SPX Iron Condor for the November 2 cycle was filled for a net credit of $1.25. The position summary is as follows:
SHORT November 2 2065 Call.
LONG November 2 2075 Call.
SHORT November 2 1980 Put.
LONG November 2 1970 Put.
Below is the risk graph of the current position as of the close Friday:
SPX October Weekly Iron Condor
The position is currently +$45 as of the close. The risk graph above has some inaccurate figures (the graph indicates the position is +$62, which is target). This happens occasionally with after-hours data. We received a $1.25 credit on entry, and the current debit to close is $.80. The position is flat delta, so will benefit from a quiet day on Monday. The position will remain open until target gain is reached, but will be closed as per the guidelines if the pre-set max loss reaches ($87).
The chart below shows the short strikes:
SPX 6 month chart
The six month chart of the volatility index VIX is below; as the rally continues the "fear" gauge continues to drop. VIX closed Friday at 13.12, down slightly from the day before.
VIX six month chart:
Next week is a relatively light week for economic news, with nothing "news-worthy" until late in the week. A recap is below:
8:30 am Jobless Claims
11:00 am EIA Petroleum Status Report
8:30 am Retail Sales
8:30 am Import & export prices
9:55 am Consumer Sentiment
10:00 am Business Inventories
Monday will be 39 days prior to December monthly expiration; so we will look to enter the SPY Iron Condor sometime next week. Suggested trade entry will be posted when the order is submitted.
For those of you who may not have been following the monthly Iron Condor on SPY, a summary of the trade entry is as follows:
- Sell a short strike with a delta in the .15 - .20 range.
- Buy a long strike 5 points away from the short strike.
- Minimum credit (for both sides) should be at least .80, or it is not recommended to enter the position.
- Target gain is 10% of the actual margin/risk. This is calculated by the width of the wings (5 point in this case = $500), less the actual credit received. For a one-contract trade using the minimum credit of $.80, the margin/risk is $420. Target gain in this example is $42.
- Max loss is 15% of the margin, or $63 using this same example.
- This position will be traded as a "no touch"; it will remain open as long as SPY remains between the short strikes, until the target gain is reached. The position will be exited at either short strike or the pre-set 15% max loss.
Position updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,